Indian BFSI Cos To Spend USD 3.5 billion on IT by 2014

The Indian BFSI sector is expected to spend USD 3.5 billion on IT by FY 2014, as per a study by market research firm Zinnov. This indicates IT spend in the vertical growing at a CAGR of 13 percent. The study further states that the BFSI vertical contributes 11.1 per cent to the overall domestic IT spend of USD 30.4.

Among the key growth drivers include regulatory compliance needs, desire to improve operational efficiencies, support for growth strategies, enhanced customer experience for competitive differentiation and creation of new business opportunities by extending reach to the unbanked population.

According to Praveen Bhadada, Director-Market Expansion, Zinnov, “The number of BFSI-specific IT deals in India has increased 600 per cent cumulatively in the last four years and nearly one-third of those deals are focused on modern technologies. The BFSI segment in India is demonstrating a definite inclination towards leveraging information technology to add real business value as it moves up the IT value chain.”

The study also brings forth the technology adoption challenges that continue to impact the sector. It indicates standardisation of process and changing management in public sector banks, limited internal IT talent, constrained budgets for smaller players and increasing security threats with consumerisation of IT as some of the barriers faced by the BFSI sector.

In terms of vendor share, foreign companies dominate the domestic IT market with a 63 per cent share as compared to 37 per cent share of domestic companies in terms of overall IT service offerings to BFSI sector.